Hong Kong stocks fell for a seventh day in eight as concern mounted that Europe will fail to contain its debt crisis, slowing the global economy.
HSBC Holdings Plc (HSBA), Europe’s largest bank by market value, slumped 2.9 percent. Standard Chartered Plc (STAN), the U.K.’s second-biggest bank by market capitalization, declined 3.9 percent. Zhaojin Mining Industry Co., a gold producer, jumped 6.1 percent after the price of the metal earlier surged to an all-time high.
The Hang Seng Index dropped 1 percent to 19,595.14 at the close, paring losses of as much as 2.6 percent. About three stocks fell for each that gained in the gauge of 46 companies. The Hang Seng China Enterprises Index (HSCEI) declined 0.7 percent to 10,502.73. The measure of Chinese companies listed in Hong Kong earlier dropped as much as 2.8 percent.
“The spread of Europe’s debt crisis is a major concern for the market,” said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. “But for Hong Kong, there are some buying interests. It’s at a valuable level right now, triggering long-term funds to come in. The market may have some good support at the current level.”
The Hang Seng Index (HSI) is in a bear market after falling 22 percent from its high in November 2010. The equity benchmark has lost 15 percent this year, the worst performance among Asia’s five developed stock markets, according to data compiled by Bloomberg. Shares on the index traded at 10.5 times forecast earnings, compared with 11.3 times for the S&P 500.
HSBC slid 2.9 percent to HK$67, and Standard Chartered declined 3.9 percent to HK$176.90.
Financial shares across Europe and the U.S. plunged yesterday amid concern that the debt crisis in countries from Greece to Italy and France is worsening. The gauge of banks, brokerages and insurers in the Hang Seng Composite Index slipped 1.3 percent today.
Futures on the Standard & Poor’s 500 Index rose 1.8 percent today. In New York yesterday, the S&P 500 fell 4.4 percent as banks slumped on concern Europe will fail to contain its debt crisis and that the U.S. economy is faltering.
Contracts to insure French government debt against default for five years increased 13 basis points to 174.5 basis points yesterday, according to data by CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.
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Cement makers dropped after Reuters reported China cut its 2012 affordable housing development target by 20 percent, citing two unidentified people close to the government. Anhui Conch Cement Co. (914), a mainland maker of the building material, tumbled 7.3 percent to HK$33.25. China National Building Material Co., a cement maker, slid 5.5 percent to HK$13.34.
China Railway Group Ltd., a builder of the nation’s rail link, and CSR Corp. (1766), a mainland train maker, sank at least 6.1 percent after the Chinese government said it will suspend approvals on new railway projects following a deadly train crash last month.
Airlines advanced. China Southern Airlines Co., Asia’s largest carrier by passenger numbers, and China Eastern Airlines Corp., the No. 2, surged at least 6.5 percent.
Among other stocks that rose, Zijin Mining Group Co., China’s biggest gold producer by market value, increased 3.2 percent to HK$3.83, and Zhaojin Mining Industry Co., a Shandong-based gold miner, gained 6.1 percent to HK$17.52 after gold earlier rallied to a record.
Futures on the Hang Seng Index lost 1.1 percent to 19,411. The HSI Volatility Index fell for a second day, extending yesterday’s 18 percent record decline. The benchmark gauge for Hong Kong stock options dropped 1.2 percent to 42.20. The current level indicates options traders expect a swing of 12 percent in the Hang Seng Index in the next 30 days.
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